Australian Dollar Falls Then Recovers Driven by Investor Sentiment

The  Australian dollar today fell against the  US dollar before recovering to  trade at  breakeven driven by  positive investor sentiment and news events. The AUD/USD currency pair today rallied higher as investors bought the Aussie ahead of a gradual reopening of  Australia’s economy.
The  AUD/USD currency pair today fell to  a  low of  0.6337 in  the  late Asian session before reversing course and  heading higher to  hit a  high of  0.6384 and  was trading near these highs at  the  time of  writing.
The  Aussie’s performance today was primarily driven by  investor expectations that a  reopening of  Australia’s economy would be good for  the  currency. Investors seem to  have discounted the  likely problems that could be facing Australia’s housing sector, which was declining before  the  COVID-19 pandemic. The  upbeat investor risk appetite was also evident in  the  equity markets earlier today, but this did not last. Analysts are expecting inflation data in  Australia to  rebound in  the  next monthly print. Still, they opine that the  Reserve Bank of  Australia will not be raising rates any time soon.
The  Aussie’s gains were capped by  the  stronger greenback as  tracked by  the  US Dollar Index, which hit a high of 100.87 earlier today. The greenback was attractive to investors given its safe-haven status and the significant uncertainties facing the global economy even after COVID-19 lockdowns are lifted.
The  currency pair’s performance over the  upcoming weekend is likely to  be affected by  geopolitical events.
The  AUD/USD currency pair was trading at  0.6369 as  at  17:17 GMT having rallied from a  low of  0.6337. The  AUD/CAD currency pair was trading at  0.8993, having risen from a  low of  0.8934.

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